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1. Company Snapshot

1.a. Company Description

TUI AG, together with its subsidiaries, provides tourism services worldwide.It operates hotels and resorts under the Robinson, Riu, TUI Blue, Blue Diamond, TUI Suneo, and TUI Magic Life brands.The company is also involved in the tour operation and airlines businesses.


In addition, it operates cruise liners.The company operates a fleet of 1,600 travel agencies and online portals; 5 airlines with approximately 150 aircraft; and 15 cruise liners, as well as approximately 400 hotels.The company was formerly known as Preussag AG and changed its name to TUI AG in June 2002.


TUI AG is headquartered in Hanover, Germany.

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1.b. Last Insights on TUI1

TUI AG's recent performance was driven by a strong earnings report, with EPS beating expectations in Q3 2025. The company's growth strategy has yielded positive results, with a notable profit jump despite challenges from heat waves and the Middle East conflict. According to analysts, TUI's earnings may just be the starting point, indicating potential for further growth. The company's focus on growth and recent earnings beat have garnered attention from investors, with some considering it a stock worth exploring further.

1.c. Company Highlights

2. TUI Group: Riding High on Summer Holidays, Navigating Airline Headwinds

TUI Group reported robust third-quarter financials, with revenue climbing 7% to reach €4.4 billion and EBIT soaring to €321 million, eclipsing previous records for a Q3 performance. This surge was primarily driven by exceptional results in Hotels & Resorts and the Markets + Airline segment, which benefited from the Easter shift. Net debt improved by €200 million, a positive sign of financial health.

Publication Date: Aug -13

📋 Highlights
  • Q3 EBIT Record:: Achieved EUR 321 million, the highest-ever third-quarter EBIT, driven by Hotels & Resorts and Markets + Airline segments.
  • Hotels & Resorts/Cruise Growth:: Full occupancy on cruise ships and Musement growth, with vertical integration boosting revenue and profitability.
  • Markets + Airline Performance:: 2% increase in passengers, 40% surge in app sales, and a new Tours product launched for personalized travel packages.
  • EBIT Guidance Upgrade:: Full-year underlying EBIT raised to 9%-11%, reflecting strong product business performance and strategic optimizations.
  • Net Debt Reduction:: EUR 200 million net debt improvement from disposals and lease refinancing, supporting long-term capital return strategies.

Hotels & Resorts Shine

TUI's Hotels & Resorts division excelled, fueled by strong vertical integration, increased average rates, and full occupancy on cruise ships. Musement, TUI's experiences platform, also experienced significant growth.

Markets + Airline Faces External Pressures

Despite the positive performance in other segments, Markets + Airline encountered challenges due to external factors like the heatwave, the Middle East situation, and heightened competition. However, TUI remains committed to a turnaround strategy focusing on product diversification, dynamic packaging, and cost optimization.

Guidance and Outlook Remain Positive

TUI raised its full-year underlying EBIT guidance to a range of 9% to 11%, fueled by the strong performance in its product businesses. While Belgium and Netherlands performance fell short, TUI anticipates significant improvement in the coming year.

Capital Allocation and Transformation Program

TUI intends to utilize proceeds from a recently issued promissory note to optimize its financing structure by refinancing aircraft leases, a strategic move similar to that employed by Ryanair and easyJet. The company also reaffirmed its commitment to a robust capital return strategy, contingent upon the overall strength of its business.

Valuation Metrics Suggest Potential

With a P/E ratio of 8.2 and a high Free Cash Flow Yield of 25.8%, TUI appears to be trading at an attractive valuation, suggesting potential for future growth and value appreciation.

3. NewsRoom

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Should You Investigate TUI AG (ETR:TUI1) At €7.85?

Nov -26

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Is There Opportunity in TUI Shares After Q2 2025 Earnings Recovery?

Oct -06

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Ryanair accused of ‘disgraceful’ attitude to older passengers

Sep -24

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Ryanair accused of ‘disgraceful’ attitude to older passengers

Sep -24

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Tui sees ‘steady’ demand in face of heatwaves and Middle East conflict

Sep -23

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The past five years for TUI (ETR:TUI1) investors has not been profitable

Sep -16

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TUI's (ETR:TUI1) Earnings May Just Be The Starting Point

Aug -20

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TUI Third Quarter 2025 Earnings: EPS Beats Expectations

Aug -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.75%)

6. Segments

Markets and Airlines - Northern Region

Expected Growth: 2.5%

TUI AG's Northern Region, comprising markets and airlines, achieves 2.5% growth driven by increasing demand for summer holidays, strategic capacity management, and cost savings from fleet modernization. Additionally, the region benefits from a strong brand presence, successful yield management, and a growing online booking platform.

Markets and Airlines - Central Region

Expected Growth: 2.8%

Strong demand for summer holidays, increased capacity in core markets, and successful yield management strategies drove 2.8% growth in Central Region's Markets and Airlines segment for TUI AG. Additionally, investments in digitalization and customer experience enhancements contributed to the segment's growth.

Markets and Airlines - Western Region

Expected Growth: 3.2%

TUI AG's Western Region Markets and Airlines segment growth of 3.2% is driven by increasing demand for leisure travel, particularly in the UK and Nordics. Capacity expansion, improved yield management, and strategic partnerships also contribute to growth. Additionally, the region's strong economy, low unemployment, and rising consumer spending power support the segment's upward trend.

Hotels & Resorts

Expected Growth: 2.2%

TUI AG's Hotels & Resorts segment growth of 2.2% is driven by increasing demand for all-inclusive holidays, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and refurbishment of existing properties have improved customer experience, leading to higher occupancy rates and revenue growth.

TUI Musement

Expected Growth: 3.5%

TUI Musement's 3.5% growth driven by increasing demand for experiential travel, expansion into new markets, and strategic partnerships. The segment benefits from TUI AG's strong brand recognition, investments in digitalization, and a growing focus on sustainable tourism. Additionally, the rise of online booking platforms and the increasing popularity of local experiences also contribute to the segment's growth.

Cruises

Expected Growth: 2.9%

TUI AG's cruise segment growth of 2.9% is driven by increasing demand for premium and luxury cruise experiences, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and sustainability initiatives have improved operational efficiency and enhanced customer experience, contributing to the segment's growth.

All Other

Expected Growth: 2.1%

TUI AG's 'All Other' segment growth of 2.1% is driven by increasing demand for travel-related services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization and cost savings initiatives have contributed to the growth. Furthermore, the segment has benefited from the recovery of the global travel industry, post-pandemic.

7. Detailed Products

Package Holidays

TUI AG offers a wide range of package holidays to various destinations worldwide, including beach holidays, city breaks, and adventure travel.

Cruises

TUI AG operates a fleet of cruise ships, offering a variety of itineraries and onboard experiences.

Hotels and Resorts

TUI AG owns and operates a portfolio of hotels and resorts, offering a range of accommodation options from budget-friendly to luxury.

Flights

TUI AG operates a fleet of aircraft, offering scheduled and charter flights to destinations worldwide.

Travel Services

TUI AG provides a range of travel services, including travel insurance, car rentals, and excursions.

Destination Services

TUI AG offers a range of destination services, including airport transfers, excursions, and activities.

8. TUI AG's Porter Forces

Forces Ranking

Threat Of Substitutes

TUI AG operates in a highly competitive industry, and customers have various alternatives for travel and tourism services. However, the company's strong brand recognition and diversified product offerings mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

TUI AG's customers have significant bargaining power due to the availability of numerous travel and tourism service providers. The company's large customer base and high customer loyalty help to reduce this power to some extent.

Bargaining Power Of Suppliers

TUI AG has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations and long-term contracts with suppliers also help to mitigate the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the travel and tourism industry is relatively low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. TUI AG's established brand and extensive distribution network also make it difficult for new entrants to gain a foothold.

Intensity Of Rivalry

The travel and tourism industry is highly competitive, with numerous players competing for market share. TUI AG faces intense competition from online travel agencies, low-cost carriers, and other tour operators, which puts pressure on its pricing and profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.82%
Debt Cost 14.73%
Equity Weight 21.18%
Equity Cost 15.48%
WACC 14.89%
Leverage 372.21%

11. Quality Control: TUI AG passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lagardere

A-Score: 6.0/10

Value: 7.2

Growth: 6.9

Quality: 4.2

Yield: 5.6

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Expedia

A-Score: 5.3/10

Value: 4.2

Growth: 6.6

Quality: 6.9

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Continental

A-Score: 4.7/10

Value: 7.7

Growth: 3.3

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Pandox

A-Score: 4.4/10

Value: 4.3

Growth: 5.4

Quality: 3.9

Yield: 2.5

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
TUI

A-Score: 4.1/10

Value: 8.0

Growth: 3.9

Quality: 4.0

Yield: 0.0

Momentum: 6.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Tripadvisor

A-Score: 4.0/10

Value: 5.2

Growth: 4.2

Quality: 5.7

Yield: 0.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.3$

Current Price

8.3$

Potential

-0.00%

Expected Cash-Flows